Third Quarter 2018 October 25, 2018 1
Welcome to our presentation of the Q3 2018 report Henrik Eskilsson, CEO Johan Wilsby, CFO
High-level summary Group s net sales grew 14% adjusted for currency effects Very positive sales trend with increasing growth rate in Tobii Dynavox New products launched, but slower sales growth in Tobii Pro VR-customers and stronger footprint in esports for Tobii Tech 3
Tobii Dynavox Global leader in assistive technology for communication Market share around 50% We empower people with disabilities to do what they once did, or never thought possible. We provide products that enable users with disabilities to speak and communicate effectively Share of the Group s sales 59% 4
Portfolio strategy paying off sales grew by 21% Eye controlled speech devices Touch based speech devices Eye controlled devices for Computer control Medical grade & funded products I-Series+ I-110 PCEye Plus Mid range products EyeMobile Plus Indi PCEye Mini Communication Software & Apps Snap+Core First Pathways for Core First Communicator Snap Scene Compass Other Software & Apps ALL Boardmaker Online Windows Control 5
Strategic aquisition of UK-based Smartbox Assistive Technology Complements our industry-leading touch and eye-tracking solutions for assistive communication with the market-leading communication software Grid Strengthens our sales presence in key geographic markets Synergies in R&D, sales and operations Increases the size of Tobii Dynavox business by ~15% Closing date was Oct. 1, 2018 Integration pending approval from CMA 6
Tobii Dynavox Q3 financials Revenue (SEK million) and Gross Margin Revenue grew 21% adjusted for currency and 32% non-adjusted Gross margin was 68% (71%) EBIT margin was 9% (6%) 71% 70% 71% 71% 69% 68% 71% 66% 68% 67% 68% 205 188 182 187 180 184 188 199 207 175 156 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2016 2017 2018 EBIT (SEK million) and EBIT Margin 41 27 25 14% 14% 31 17% 20% 17 18 10% 10% 9 6% 30 16% 14 8% 22 11% 18 9% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2016 2017 2018 7
Tobii Pro World leader in eye-tracking solutions for understanding human behavior Market share over 60% Provides eye tracker hardware and analysis software, plus market research consulting 2,000 academic and 3,000 commercial customers Share of the Group s sales 30% 8
Tobii Pro Q3 highlights Expanding our offerings to meet the needs of more customers in different fields Launched Tobii Pro Sprint, easy to use, cloud-based solution for agile user testing Added Tobii Pro Lab 360 software for user testing in VR environments Low sales growth, but strong underlying demand SMI effect behind us Q3 2017 boosted by unusually high sales to government customers in the US 9
Tobii Pro Sprint Eye tracking analytics in UX and agile development https://www.tobiipro.com/sprint/ 10
Tobii Pro Q3 financials Revenue (SEK million) and Gross Margin Revenue increased 1% adjusted for currency, 10% non-adjusted Gross margin at 76% (76%) EBIT margin at 5% (11%) 73% 72% 72% 76% 75% 73% 76% 73% 74% 73% 76% 97 98 92 88 80 74 66 59 53 58 61 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2016 2017 2018 EBIT (SEK million) and EBIT Margin 19 12 15 19% 9 16% 6 16% 11% 4 10% 1-3 0 0-2 5% 0% 0% 2% -3% -5% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2016 2017 2018 11
Tobii Tech World s leading supplier of eye tracking technology and solutions to integration customers Targets high volume markets such as PC gaming, mainstream computers, virtual reality, augmented reality, smartphones, and numerous niche markets Share of the Group s sales 11% 12
Continued strong progress in VR market Good progress in integration projects with significant VR customers and partners, mostly targeting products in market during 2019 and 2020. StarVR announced upcoming StarVR One with Tobii eyetracking Tobii announced agreement with leading VR manufacturer for development and delivery of eyetracking technology to upcoming VR headset StarVR One 13
VR market estimate AR/VR Headset Market Product Category Segment Group 2018 Shipments (millions) 2022 Shipments (millions) Virtual Reality Augmented Reality Commercial 1,3 16,0 Consumer 2,8 15,5 Commercial 0,2 18,8 Consumer 0,0 2,8 Total 4,3 53,1 Source: IDC Worldwide Quarterly AR and VR Headset Tracker, Sep 20, 2018 Excluding headsets without screens 14
Tobii IS5 next generation integration platform for PC market Key advancements The brand new Tobii EyeSensor, our customdesigned CMOS image sensor specifically optimized for eye tracking Completely invisible to the human eye Modular design and 60% smaller footprint Up to 75% more power efficient Tobii EyeCore algorithm improvements for better tracking under difficult conditions Support for biometric security features using face ID Customer integration projects ongoing 15
Increased use in esports and streaming Used in several major broadcasted tournaments Eleague CS:GO, Street Fighter and Tekken ESL ONE NY Tobii eye tracking won the Esports Business Summit Award for best tech in e-sports together with Eleague Major games with eye-tracking support Shadow of the Tomb Raider, Assassin s Creed Odessey and several more 16
Tobii Tech Q3 financials Revenue (SEK million) and Gross Margin Revenue increased 21% year-over-year, adjusted for currency, 35% non-adjusted Gross margin was 50% (46%) Operating loss amounted to -82 MSEK (-67) 50% 48% 50% 50% 46% 41% 39% 41% 43% 43% 42% 41 37 37 29 29 32 34 25 21 16 18 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2016 2017 2018 EBIT (SEK million) 2016 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3-49 -52-42 -64-76 -87-67 -61-66 -82-82 17
Tobii Group Q3 financials EBIT for the Group (SEK million) Revenue increased 14% year-over-year adjusted for currency, 25% non-adjusted Gross margin was 71% (73%) Group EBIT was -60 MSEK (-49) Impacted by strong sales growth in Tobii Dynavox and Tobii Tech 2016 2017 2018 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3-17 -11-10 -13-29 -37-49 -58-59 -60-71 EBIT per business unit (SEK million) 25-15 18 9 9 4-55 -95-49 -67-60 -82 Tobii Dynavox Tobii Pro Tobii Tech Group Q3 2017 Q3 2018 18
Balance sheet and cash flow Cash flow in Q3 2018 negatively impacted by a increase in trade working capital Cash position at 338 MSEK Debt financing arranged for the Smartbox acquistion Group balance and cash flow summary Group cash flow after continuous investments (MSEK) Tobii Group (MSEK) Q3 2018 Q3 2017 7 7 2 Total Assets 1 256 1348 Equity 840 986 Equity Ratio 66 73 Net Cash (+)/Net Debt(-) 338 573 Cash flow after continuous investments -71-56 -16-22 -23-32 -39-45 -42-56 -65-62 -78-74 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2015 2016 2017 2018 19
Summary Proven technology with strong unique benefits in large markets Global technology and market leadership Profitable Clear no. 1 position Market with significant unmet needs support longterm growth opportunity Profitable Clear no. 1 position Long-term growth opportunity by driving use beyond early adopters Clear no. 1 position Leading IP portfolio Multiple very large mass-market opportunities 20